– Potentially has a year to find out things – Dagsavisen
Professor at the Norwegian School of Management (NHH), Frode Steen, believes that SAS is not on the verge of bankruptcy, but believes the day is getting closer for each day of strike.
– If they do not get something done with the costs, financed by the company again and reduced the debt, they will not have the opportunity to recover. It is not a super-short-term danger of bankruptcy in SAS, but this strike makes the situation more difficult and leads to that day coming faster. That is why they choose to get started with the voter, says Steen.
Steen points out that SAS on Tuesday applied for bankruptcy protection in the USA. Simply explained, this means that they have applied to a US court for protection against being declared bankrupt. In retrospect, the war of words between the pilots and the management of the company has hardened.
Feeling cheated
Aviation analyst Jan Ohlsson also does not believe that there is any immediate danger of bankruptcy in SAS, but:
– It was so important to earn many kroner throughout the summer for it to be put in a small pot. Well, you risk increasing the wallpaper instead, while confidence is weakened. Then the precipice gets closer, maybe even before the turn of the year, says Ohlsson to the Swede Aftonbladet.
The Norwegian SAS pilot association believes SAS is to blame. Following the reports of bankruptcy protection, the association has said that they feel cheated.
– The pilots are wise, and this reinforces our impression that this is a deliberate strike by the management – to create a scapegoat, says leader of the SAS pilots in Norway, Roger Klokset, in a press release.
The management of SAS has denied that they blame the pilots.
[ – Denne konflikten er vanskelig å løse ]
– The strike is not the main reason that we seek bankruptcy protection, but it has accelerated the process. The board found it important to go out and say that the company continues to follow the SAS Forward plan, says SAS chief Anko van der Werff to TV 2.
SAS Forward is the name of the rescue plan SAS launched in February this year. Van der Werff has given several clear messages to the pilots.
“We have asked the unions to hopefully end the strike and come back to the negotiating table with us, because what we really do not need for a moment is this disruption, neither for our passengers nor financially,” van der Werff told E24. He also went hard against the pilot on Monday.
On Tuesday, the Norwegian SAS pilots met in a large meeting at Gardermoen. After the meeting, the leader of the Norwegian Pilots’ Association, Aleksander Wasland, says that the pilots are willing to stay in the conflict for as long as needed, writes E24.
[ SAS-pilotene i streik ]
New subsidiaries
On Monday, 900 SAS pilots went on strike. On Tuesday, it led to 163 canceled flights to and from Norway, and many holiday-loving travelers have had their plans destroyed. SAS estimates that 200-250 flights and up to 30,000 passengers may be affected daily.
Conflict comes after 560 SAS pilots lost their jobs during the pandemic. At the same time, SAS set up new subsidiaries, SAS Link and SAS Connect. In these companies, the other pilots were employed. The dismissed pilots will not get back their jobs in the new companies and will not be allowed to keep the conditions they had before.
SAS has been in financial trouble for a long time, and has planned to save 7.5 billion Swedish kroner annually. They are also trying to cut the debt, which the company states is over 40 billion Swedish kroner. This will be done by converting 20 billion from debt into shares and by raising a new 9.5 billion kroner from various investors. Both Sweden and Norway have said no to investing more money. Denmark has said yes.
[ Hege Ulstein: Det SAS-ledelsen driver med nå, er høyt spill ]
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Facts about SAS and the strike
- The airline SAS was founded in 1946 after a merger of the national airlines in Norway, Denmark and Sweden.
- Prior to the pandemic, SAS had more than 800 daily departures. The company flies over 30 million passengers a year to over 125 destinations in Europe, the United States and Asia.
- Sweden and Denmark own 21.8 percent of each share in SAS, the Norwegian state has previously been a shareholder.
- On Monday 4 July at 12 noon, the mediation deadline expired between SAS and the SAS pilots after several postponements.
- Right after 12 o’clock, 900 SAS pilots went on strike, which leads to the majority of SAS flights to and from Norway being or being canceled.
- In Norway, 254 SAS pilots in the Norwegian Pilots’ Association in LO have gone on strike. 148 have been taken out of the Pilot Association in Parat.
Source: NTB, Ritzau, NRK
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Worn since deregulation
NHH professor Steen says at SAS, to varying degrees and strengths, has struggled financially since the start of the regulation of the Norwegian aviation market in the 90s.
– Only in shorter periods have they made money. When they came in with low prices, they were not willing to pay and SAS failed to compete in the new market. It became a battle against own costs, says the professor.
– How have the costs for SAS looked compared to other airlines?
– SAS has survived because they are better at selling animal tickets, but the market has changed. Due to the pandemic, reduced meeting activity and the fact that more meetings go over Teams, SAS has lost important customers. I have also received support from SAS at irregular intervals. It is possible to have been exhausted. Only Denmark is involved and they also demand a cost reduction.
– How long can SAS afford the strike?
– If they come under this system of protection from bankruptcy, I think it is a year that is possible to find out something. During this period, they have asked for money to support the company and to enable the company to operate normally.
To E24 Steen says that SAS has realized that they need help, and adds that a reconstruction of the company will require something from all parties.
– The alternatives in such a process are that you come out as a better company, or you do not come out again at all. And as a lender, you risk losing everything, or you are left with a share in the company on the other side of a process, Steen tells E24.
[ Derfor er det flykaos i Europa ]
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Watch video: Leader of the SAS pilots after the strike meeting